State's home buyers seek bargains, move slowly

Associated Press

Published 4:00 am, Friday, September 12, 2008

Lower home prices and falling mortgage rates have motivated California home buyers in 2008, but thoughts that prices may fall further have slowed decision-making, a real estate industry association said Thursday.

In its "2008 Survey of California Home Buyers," the California Association of Realtors said 69 percent of all home buyers reported that price declines encouraged them to buy this year, and 40 percent said that low interest rates enabled them to move to a better location.

California housing prices have fallen sharply since the national housing market bubble burst two years ago. The state had registered among the highest price gains during the five-year boom.

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Recent data have shown that buyers are slowly returning to the market as a spike in foreclosures has sent prices tumbling. In the second quarter, California and Nevada were the only states to show sales gains compared with a year ago, according to an August report by the National Association of Realtors. Prices in Los Angeles, Riverside and Sacramento have plunged by 30 percent or more, according to the association's data.

The real estate agent trade group, based in Los Angeles, said the possibility of further declines has led buyers to spend "considerably more time" searching for a home than in previous years.

"Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace," California association President William Brown said in a statement.

The group also said more buyers are using the Internet to search for homes or a real estate agent, with 78 percent using the Web compared with 72 percent in 2007.